People's United Financial Inc. (NASDAQ:PBCT) Q4 2019 Earnings Conference Call - Final Transcript

Jan 16, 2020 • 05:00 pm ET

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People's United Financial Inc. (NASDAQ:PBCT) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Our first question comes from Mark Fitzgibbon with Piper Sandler.

Analyst
Mark Fitzgibbon

Hey, guys. Good afternoon.

Executive
John P. Barnes

Hey, Mark.

Analyst
Mark Fitzgibbon

First question I had is just to clarify a comment, Jack, you made about the loan balances. So, if we take the year-end loan balances of, call it $43.6 billion and that grows sort of 2% to 4%, and did I hear correctly that you're going to see run-off of $300 million to $400 million on the United portfolio this year and another $300 million to $400 million from New York multifamily run off?

Executive
David Rosato

Yes. That's correct, Mark.

Analyst
Mark Fitzgibbon

So, if loans -- split the difference on the growth 2% to 4%, say it's $1.3 billion [Phonetic] less somewhere between $600 million and $800 million of loan growth or run off, I should say?

Executive
John P. Barnes

Okay. The loan growth excludes the run off of [Speech Overlap].

Executive
David Rosato

Correct. So if you take the ending total loans of $43.6 billion, reduce the $1.346 billion of United and the multi-family book of $737 million, brings you down to $41.5 billion. So, that's the base that the loan growth is off of. Then, additionally we expect those two portfolios to run off between $300 million and $400 million each during the year.

Analyst
Mark Fitzgibbon

Got you. Okay. And then secondly, can you help us think about the purchase accounting impact on the margin over the next maybe quarter or two?

Executive
David Rosato

Yeah. So, we called out, Mark, the 5 basis points in Q4. That is a good number. The way I think about is kind of two components, obviously, the loan side and the deposit side. The loan purchase accounting will be with us for about four years. On the deposit side, most of that mark is around the CD portfolio, which is about a year. So, you're going to see a first half benefit, larger than the second half, but the second half will be a run rate for a couple of years.

Analyst
Mark Fitzgibbon

Okay. And then the $16.5 million write-off for intangible asset, what is the asset that the write-off is on? I didn't see it in the release anyway.

Executive
David Rosato

So that was the value that we attributed to the mutual fund business at acquisition of Gerstein Fisher.

Analyst
Mark Fitzgibbon

Okay. And then lastly, Jack. I wondered if you could comment on your outlook for M&A in the Northeast and has your view on bigger deals changed in light of how the market has received so well some of these larger transactions?

Executive
John P. Barnes

So, I really don't see the pace of M&A generally changing dramatically one way or the other in the Northeast I would say at this point. And in terms of appetite for larger deals, I mean, we've been willing to consider larger deals if appropriate, the right fix, etc. So -- and again, I don't think our view has changed. There is not many larger deals across our footprint. I will say that, if you look at our footprint and what's out there.

Analyst
Mark Fitzgibbon

Thank you.

Executive
David Rosato

Your're welcome.

Operator
Operator

Thank you. Our next